1. Field of the Invention
The present invention relates generally to methods and systems for conducting commercial transactions over a distributed communication network, such as the Internet, and more specifically, the World Wide Web. More particularly, the present invention relates to a method and system wherein a merchant loyalty service provider furnishes customer loyalty programs to on-line merchants in a manner that is transparent to the merchant""s customers.
2. Background and State of the Art
Presently, the primary focus of transaction-based Internet web site companies is on building name or brand recognition, market share, and customer service, as opposed to profit maximization. In many cases prices are set so low that even variable margin contributions are negligible when offset against expenses.
Some analysts believe that profitability ultimately will be achieved either by the realization of increases in volume that are large enough to cover overhead expenses and provide a substantial profit margin, or by eventual reduction in the number of competitors as the markets mature. However, it is likely that Internet-based businesses inevitably will face the same margin pressures as conventional businesses, and thus will need to find additional opportunities to expand margins.
One such opportunity is the development of secondary services such as customer loyalty programs or add-on service programs. Such services enhance profitability by providing increased revenue on each sale. Because of the focus of most transaction-based web site companies on establishing name or brand recognition and building market share, such companies today do not have the resources or ability to devote to the development and delivery of secondary services.
Accordingly, there exists a need in the art for providing customer loyalty programs to on-line merchants in a manner that requires little or no effort on the part of the merchant.
The present invention provides a solution to the problems and shortcomings in the art as described above, by providing a method for cross-marketing products and services to customers of specific merchant web sites on the Internet by a merchant loyalty service provider web site on the Internet, comprising the steps of providing a hyperlink to the merchant loyalty service provider web site from the merchant web site whereby the customer can access the merchant loyalty service provider web site directly from the merchant web site, providing at the merchant loyalty service provider web site a customer loyalty benefit offer related to the business of the merchant web site, receiving at the merchant loyalty service provider web site an acceptance of the customer loyalty offer by the customer, and providing the customer loyalty benefit to the customer in response to the acceptance.
According to another aspect of the invention, a system is provided which performs the method described above.